Why Not Avoid The Financial Problems?
Stanley Feld M.D.,FACP,MACE
It is
very clear to me that neither the Obama administration nor the senate wants to
solve the root causes of the federal deficit problem.
The
sequestration debates are not getting to the root causes of the deficit. Eighty
five billion dollars will not make a dent in America’s 16 trillion dollar
budget deficit.
President
Obama is running around the country scaring everyone with the notion that vital
services must be cut or else the country will be paralyzed.
Recently
the congress and the President appropriated $60.2 billion dollars for aid to
Sandy victims. This is almost as much as the sequestration is going to
eliminate.
“The Senate voted
Monday to provide $50.5 billion in aid for victims of Superstorm Sandy. The
vote means Congress has approved a total of $60.2 billion in aid for Sandy
victims”.
America’s
big deficit problem is created by out of control entitlement programs. Obamacare
is adding to entitlement spending. It will only increase the deficit.
Our
politicians’ should be working hard to figure out a solution to increasing entitlement
spending. Yet the Obama administration has refused to consider entitlement
reform.
America’s
two largest entitlements are Medicare and Social Security. Food stamps, and unemployment
insurance, among others has some impact on the deficit.
Simple
reforms and a decrease in waste could solve the problem.
The
following two articles summarize the illusion of the existence of Social
Security and Medicare Trust Funds.
In
reality the money goes into these trust funds from payroll withholdings. The
government then borrows the money to pay general expenses. It provides an IOU
to the trust funds. In essence the trust funds are broke and the IOUs are an
unfunded liability of the federal government..
“And since the
federal government borrows the surplus from both funds (Social Security and
Medicare) to pay other expenses, the only thing in those trust funds own
special, non-negotiable, interest-bearing IOUs.”
http://articles.washingtonpost.com/2012-10-18/opinions/35502037_1_trust-fund-medicare-trustees-health-care
In order
to pay Social Security and Medicare obligations the government shifts revenue
of current accounts into the trust fund accounts.
Citizens
paying into Social Security and Medicare all those years thought they were
paying for a retirement annuity. The assumption was the money would grow with
wise government investments and those funds would be able to pay their promised
liability to seniors.
Those
payments were really a disguised tax. As baby boomers become eligible for
Medicare and Social Security the obligation is increasing.
America
is reaching the point where more people are receiving these entitlement
benefits than the younger people who are funding them.
The logical result is the premium price for
Medicare coverage is scheduled to double in 2014. The deductibles for services are
scheduled to increase. The age requirement for eligibility is about to rise. Access to care is decreasing as physicians
refuse to take Medicare. Rationing of care is increasing as hospitals are being
forced to assume risk. No one wants to assume the risk of taking care of sick
people. Especially when they are not very good at evaluating the risk.
Everyone
knows all of this. Nevertheless they turn away as the government either borrows
more or prints more money.
Americans
have been told by multiple administrations that citizens could not handle their
own Social Security or Medicare annuity very well. Therefore the government
must do it for them.
The
government has done an awful job managing our retirement annuities.
Social
Security and Medicare Trust Funds must become real trust funds that grow in
value in the future or the government should hand control over to the people.
The Obama
administration’s estimate is it costs 3 billion dollars a year. They are wrong. Ask any physician.
Why
should physicians or hospital systems assume the risk of missing a diagnosis by
not doing a test?
The
emotional and financial consequences of a frivolous lawsuit can be devastating.
Simple
and fair tort reform will save the healthcare system around 500 billion dollars
a year. The 500 billion dollars is more
than 5 times the cost of the 85 billion dollar sequestration. The administration
is wasting 500 million dollars to protect the business of malpractice trial
lawyers.
The
administration claims its overhead for Medicare is only 2 ½ %. This represents
the cost to pick an insurance company to adjudicate insurance claims. The true
cost is not clear. However, it is somewhere between 40-60% of every Medicare
dollar spent.
The ten
hidden taxes written into Obamacare are now starting to be felt. The Obamacare taxes
are going to increase the cost of medical care not decrease the cost as the
affordable care act promises.
Patients
are directly responsible for many of their own medical outcomes. If patients had skin in the game and
financial incentives they would pay attention to their self -care and their
physicians’ recommendations.
There are
no incentives in Obamacare for patients to manage their care effectively.
Financial gain would get their attention.
These are
just a few of the solutions to the real problems in healthcare. There is much
more waste in federal spending than $85 billion dollars a year.
All you
have to do is look at the list of extraordinary waste that Senator Tom Coburn
has compiled.
Rand Paul
did a clever thing. He sent $600,000 of his senate office budget back to the
U.S. Treasury after carefully trying to save money. The 49 other senators and
over 400 congressperson ought to do the same. It would set an example for all
of the bureaucracy to do the same. In fact President Obama ought to demand it.
“The
Kentucky Republican returned $600,000 in funds he saved from his Senate office
budget in the last year, the Louisville Courier-Journal reported.
“It’s
the only budget I control,” Paul said at a news conference in Louisville. “It’s
not enough, but it’s a start.”
If every
congressperson saved 600,000 a year as Rand Paul did the deficit would be
reduced by $321 million dollars more a year. If all the cabinet positions and
their agencies tried to save money and were rewarded for saving money we would
start to make some progress in decreasing the deficit.
The Simpson
Bowles Report commissioned by President Obama would be helpful in eliminating
unnecessary agencies and duplication. Their report has been ignored by the
Obama administration.
Why has
President Obama refused to listen to people who have exposed the many areas of
government waste? It is incomprehensible.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
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